If income were distributed equally our economic _________ would suffer.
Fill in the blank(s) with the appropriate word(s).
efficiency or incentives
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Why do people and firms in the United States supply dollars to the foreign exchange market?
What will be an ideal response?
If the local cable TV company is a natural monopoly and required by regulators to set its price equal to marginal cost, there is a deadweight loss in the market and the firm might need a government subsidy to survive
Indicate whether the statement is true or false
A commitment strategy is an agreement in which players agree to:
A. submit to a penalty in the future if they defect from a given strategy. B. cooperate in repeated games until someone defects. C. cooperate before the game begins. D. None of these is a definition of a commitment strategy.
Explain why new classical economists favor a laissez faire policy approach.
What will be an ideal response?